An ethical dilemma: Who should pay?

Kate King, Staff Writer

Published 5:00 pm, Tuesday, April 26, 2011

STAMFORD -- The Board of Ethics is gearing up for another round of public hearings, but an in-depth look at the rising legal costs associated with the ongoing saga reveals inconsistent standards for defendants, who are forced to reach into their own pockets to battle accusations of ethics violations.

Stamford's Code of Ethics and city Charter are silent on who should foot the bill for ethics proceedings, and decisions rendered by Director of Legal Affairs Michael Larobina over the past year have been contradictory. Elected officials say the city should indemnify them for legal costs they incur, because to do otherwise would discourage residents from serving on the volunteer boards that act as an independent check and balance on city government.

Related Stories

Larobina and others say writing a blank check for elected officials' legal fees would make the city liable for tremendous costs as well as encourage abuse of the ethics code.

more than $150,000 in legal fees gone

On April 27, 2010, Human Resources employee Tania Barnes filed an ethics complaint against then-Board of Finance chairman Joe Tarzia, accusing him of interfering in the disciplining of a city employee. In the ensuing months, a flurry of complaints were lodged with the ethics board, a federal lawsuit was brought against the city and a suit was filed with the state Commission on Human Rights. The Board of Ethics' investigating panel found probable cause Tarzia had violated the Code of Ethics and began public hearings in October.

The proceedings ended abruptly in late February, when the embattled and financially drained Tarzia reached a settlement with the city and resigned from elected office. The agreement left only one finding of probable cause, filed by City Fleet Manager Michael Scacco against city Rep. Sal Gabriele, R-16, pending before the Board of Ethics. Scacco alleged in his complaint that Gabriele harassed him for more than a year for his disciplining of a city employee. Activity by the ethics board stalled as members worked to schedule public hearings, which will begin May 5.

The lull in the ongoing saga gives onlookers a moment to step back and assess the damage. Most significantly, Tarzia stepped down from his position on the Board of Finance after 24 years in office. Always a controversial figure, Tarzia's resignation was cheered by those who viewed him as an obstructionist bully and bemoaned by those who saw him as an indefatigable fiscal watchdog.

More tangibly, the ethics proceedings have so far cost Stamford taxpayers about $150,000 in legal fees. More than 50 percent of that amount is associated with Tarzia. The city accrued $42,390 in legal fees associated with a federal lawsuit Tarzia filed against the city and eventually paid him $45,000 to settle the matter. Tarzia's resignation was a condition of the agreement.

The city also paid $9,963 -- and expects to make another payment estimated at $20,000 -- to Laske Law Firm, which represented the Board of Ethics during public hearings for a complaint filed by Scacco against Tarzia and Bob Kolenberg, then-vice chairman of the finance board.

Taxpayers paid Kolenberg's legal fees of $30,625 after the complaint filed against him was tossed on technical grounds. A small amount of money, $3,000, was also paid to attorney Mark Durkin for representing Tarzia in the early stages of the ethics epic.

In addition to the $150,000, as of Aug. 1, 2010 the city had spent $8,244 on outside counsel to represent the city for the human rights complaint filed by Barnes.

Larobina said the city did not pay for the legal representation Barnes hired after filing the ethics complaint against Tarzia, nor will it pay for Scacco's attorney. Additional legal fees for the city are anticipated as public hearings resume for the complaint against Gabriele.

Who must pay?

Since the charter and Code of Ethics do not stipulate who should pay legal fees associated with ethics complaints, the determination has been left to Larobina, Stamford's corporation counsel. His approach to the subject has been contradictory. At first, Larobina appears to have followed past precedent, which he observed first hand from his former seat on the Board of Representatives during Stamford's last ethics saga in the early 1990s.

The six-year long ethics case, which centered on alleged violations of city purchasing laws related to the installation of a 911 emergency dispatch center, cost Stamford taxpayers more than $820,000. The city paid for everything, including the Board of Ethics' legal representation, which amounted to $330,000, and attorney fees for the case's numerous defendants. Former Mayor Thom Serrani accrued $323,902.31 in legal costs, which were paid by the city even though the Board of Ethics ruled he had violated Stamford's ethics code.

In apparent keeping with this precedent, Larobina initially hired legal representation for Tarzia after Barnes filed her April 2010 complaint against him.

"I will have to hire outside counsel to represent you in connection with this ethics complaint," Larobina wrote to Tarzia in a letter dated May 4, 2010.

The city engaged Attorney Mark Durkin to represent Tarzia, and paid him $3,000 before deciding it was "inappropriate" for the city to pay Tarzia's legal fees.

"Initially he was demanding that the city hire an attorney for him," Larobina said Wednesday. "And initially we had said, `OK, fine,' but when we looked at the statute and we looked at the case law we made a determination that that was not appropriate."

Larobina informed Durkin the city would no longer cover Tarzia's legal fees in a letter dated June 3, 2010. Tarzia would be indemnified only after the ethics proceedings had concluded, and only if he was found to have not violated Stamford's Code of Ethics. Larobina based his determination on Connecticut General Statutes and case law.

Legally, Connecticut municipalities are only allowed to function based on powers given to them by the state. General Statute section 7-148h gives towns and cities permission to establish ethics agencies and outlines a very small set of requirements for how these boards or commission operate.

Municipalities are not required by state law to reimburse elected officials or city employees for legal costs associated with ethics complaints, no matter what the outcome of public ethics hearings proves to be.

The city did, however, reimburse Kolenberg after the ethics complaint against him was dismissed for the roughly $31,000 he spent on legal representation.

"We decided that if they were in fact cleared and not to have found to have violated the code that we would pay," Larobina said. "And we based that decision on state case law and state case statutes. We made the decision that if someone was cleared than we would pay."

Who should pay?

The repercussions of the indemnification issue are illustrated by Tarzia's battle with the ethics board. Tarzia, who was never one to back down from a fight, said he only resigned because of the financial strain.

"I was at a point where my legal fees were well over $100,000 and I just figured, what was I going to do?" he said. "I couldn't afford it. My life was in turmoil and I said `I don't need this.'"

Tarzia's lawyer, Joe Sargent, said his interpretation of another section of Connecticut's general statutes, section 7-101a, requires the city to pay for legal fees. Larobina disagreed with this assertion.

"It actually changes the whole dynamic of an attorney's approach to the defense of the client, withholding his statutory indemnification rights," Sargent said.

Gabriele said he has so far spent $40,000 on his legal representation for the ethics complaint. He believes the city should shoulder the cost.

"I have a child on the way and the unknown part is am I going to be reimbursed and how much is it going to cost to defend myself against these charges," Gabriele said Thursday. "I'm 36 years old and I need to defend my name. I don't want to back down because I'm totally innocent of these charges and I want to clear my name."

A policy that says city officials will only be reimbursed if they are found to have not violated the Code of Ethics has a chilling effect on political participation, he said.

"With elected officials, we're volunteers," Gabriele said. "If you're asking elected officials to ask the tough questions and look into wasteful spending and possibly corruption, how do you not indemnify them if they have ethics complaints filed against them? How many elected officials are going to put their neck on the line knowing this will happen to them?"

Larobina said the city would be sending a bad message to employees and elected officials if it promised to unconditionally pay for their legal fees. People might be less hesitant to commit ethical violations if they knew they would be legally represented by the city, he said.

"Why would we encourage people to violate the Code of Ethics?" Larobina said.

Board of Representatives President Randy Skigen was unavailable for comment this week. Former President David Martin said there is "no good answer" to the dilemma.

"This is an issue where I'm uncomfortable with all answers," Martin said Thursday. "Politicians, someone who is serving as a volunteer ... should their personal fortunes be subjected to possible attack through a jury process? If I got brought before the ethics board, I would talk to an attorney."

"On the other hand, you can't write a check to, say Joe Tarzia's attorney, and leave the amount blank," he said. "I am very troubled that there could be an open season."

Staff Writer Kate King can be reached at kate.king@scni.com or at 203-964-2263.